The Rent-to-Value Ratio, or RTV, is a quick metric used to estimate a property’s income potential relative to its price. It’s calculated by dividing the monthly rent by the property’s purchase price. For example, a $1,500/month rental on a $200,000 home yields a 0.75% RTV. Many investors aim for an RTV of 0.8% to 1.2% depending on their cash flow goals and market.
While simple, RTV is a handy screening tool when comparing multiple single-family rentals. Meridian includes RTV in our financial breakdowns so clients can quickly evaluate which properties offer the best balance of affordability and income.
